Japan and the Philippines signed an accord Thursday to expand the size of their bilateral currency swap arrangement to $6.5 billion from $3 billion as part of efforts to boost Asian financial cooperation, Finance Ministry officials from Tokyo said.
The agreement enables Japan to extend up to $6 billion to the Philippines and receive up to $500 million from Manila, in the event of an immediate need for balance of payments or short-term liquidity support, they said.
The deal -- inked during a series of Asian financial meetings in the southern Indian city of Hyderabad -- will replace the one-way accord under which Japan can provide up to $3 billion to the Philippines.
The new deal increases the total size of bilateral currency swap accords under the Chiang Mai Initiative to $75 billion. The accords involve eight Asian countries.
The initiative has created a network of 16 bilateral currency swap arrangements among the central banks of Japan, the Philippines, China, South Korea, Indonesia, Malaysia, Singapore and Thailand to fight what they call "speculative attacks" on their currencies.